Despite the revenue decline, the gross margin of the company improved to 44.5 per cent from 38.9 per cent, and operating margin rose to 5.8 per cent from negative 3.0 per cent. Gross margin improved significantly due to lower supply chain costs, product costs and lower sales of end-of-life inventory, Wolverine said in a press release.
Wolverine Worldwide’s FY24 revenue has declined 21.8 per cent to $1.76 billion, though gross margin rose to 44.5 per cent due to lower costs.
The Active and Work groups revenue fell 13.4 and 5.3 per cent respectively.
Q4 FY24 overall revenue declined 6.1 per cent to $494.7 million.
CEO Hufnagel highlighted a successful turnaround.
FY25 revenue is expected to grow 2.5–4.3 per cent.
The Active group saw a revenue drop of 13.4 per cent YoY, while the Work group’s revenue declined by 5.3 per cent. The other segment experienced a significant 83.4 per cent revenue decrease. Among revenues of key brands, Merrell saw a decline of 11.5 per cent, Saucony down by 18.0 per cent, Wolverine decreased 4.0 per cent, and Sweaty Betty dropped 2.4 per cent.
The international revenue fell 15.9 per cent, while direct-to-consumer (DTC) revenue declined 16.9 per cent. The operating expenses dropped 27.7 per cent, while diluted earnings per share (EPS) turned positive at $0.58 from a loss of $0.51, a 213.7 per cent improvement.
Fourth quarter (Q4) financials
In Q4 FY24, Wolverine Worldwide reported total revenue of $494.7 million, a 6.1 per cent decline compared to $526.7 million in the prior year. However, ongoing total revenue grew by 3.0 per cent to $494.7 million.
The revenue of Active group declined by 2.8 per cent, while the Work group saw strong revenue growth of 20.6 per cent. The other segment’s revenue dropped significantly by 80.2 per cent. Among key brands, Merrell’s revenue grew by 1.0 per cent, Wolverine’s revenue surged 20.5 per cent, while revenues of Saucony and Sweaty Betty declined by 5.3 per cent and 5.9 per cent, respectively. International revenue fell by 5.4 per cent, and DTC revenue dropped by 18.8 per cent.
“A year ago, we outlined an ambitious turnaround strategy composed of three chapters, i.e, stabilisation, transformation, and inflection. We shared a plan to meaningfully strengthen the company’s balance sheet, expand profitability, and sequentially improve revenue trends—culminating with an inflection to growth in the final quarter of 2024. I am pleased to report that we accomplished all these objectives,” said Chris Hufnagel, president and chief executive officer of Wolverine Worldwide.
“In Q4 we exceeded our expectations for revenue and earnings and inflected to growth as a Company – delivering better-than-anticipated results for 2024. As we begin 2025, our brands are poised to continue to build on our momentum, standing on a much healthier foundation with stronger product pipelines and compelling storytelling. Our team is encouraged by the work we have accomplished together and excited to turn the page,” added Hufnagel.
Outlook
For fiscal 2025, Wolverine Worldwide expects revenue between $1.795 billion and $1.825 billion, reflecting a 2.5 to 4.3 per cent increase compared to its ongoing 2024 business and 4.7 to 6.5 per cent growth in constant currency terms. The company expects gross margin to rise by 100 basis points (bps) to 45.5 per cent, while operating margin is expected to improve to 7.7 per cent, up 190 bps from 2024.
The adjusted operating margin is forecast to reach 8.3 per cent, increasing by 80 bps. The company anticipates an effective tax rate of 18.0 per cent and diluted earnings per share (EPS) between $0.95 and $1.10, with adjusted diluted EPS ranging from $1.05 to $1.20. These projections include a negative $0.08 impact from foreign currency fluctuations. The diluted weighted average shares are estimated at 81.5 million.
Fibre2Fashion News Desk (SG)
